CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Three Months Ended
December 31, September 30, December 31,
(in millions, except per share
data) 2005 2005 2004
PER SHARE AND COMMON STOCK DATA
Diluted net income $1.25 $1.41 $1.21
Cash dividends declared 0.55 0.55 0.52
Common shareholders' equity (at
period end) 31.11 30.81 29.94
Average diluted shares (in
thousands) 165,738 168,387 172,224
KEY RATIOS
Return on average common
shareholders' equity 16.28% 18.59% 16.39%
Return on average assets 1.53 1.78 1.63
Average common shareholders' equity
as a percentage of average assets 9.42 9.57 9.93
Tier 1 common capital ratio * 7.83 7.98 8.13
Tier 1 risk-based capital ratio * 8.44 8.60 8.77
Total risk-based capital ratio * 11.66 12.07 12.75
Leverage ratio * 10.02 10.07 10.37
AVERAGE BALANCES
Commercial loans $25,666 $25,230 $22,563
Real estate construction loans 3,416 3,202 3,178
Commercial mortgage loans 8,799 8,631 7,999
Residential mortgage loans 1,465 1,418 1,275
Consumer loans 2,675 2,703 2,721
Lease financing 1,288 1,300 1,259
International loans 1,940 2,098 2,134
Total loans $45,249 $44,582 $41,129
Earning assets 49,764 49,066 47,018
Total assets 54,130 53,462 51,116
Interest-bearing deposits 26,320 25,540 25,572
Total interest-bearing liabilities 32,683 31,488 30,192
Noninterest-bearing deposits 15,158 15,734 14,755
Common shareholders' equity 5,101 5,116 5,077
NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) $502 $513 $467
Fully taxable equivalent adjustment 1 1 1
Net interest margin 4.00% 4.15% 3.96%
CREDIT QUALITY
Nonaccrual loans $138 $186 $312
Other real estate 24 34 27
Total nonperforming assets 162 220 339
Loans 90 days past due and still
accruing 16 14 15
Gross loan charge-offs 38 47 55
Loan recoveries 16 26 20
Net loan charge-offs 22 21 35
Allowance for loan losses as a
percentage of total loans 1.19% 1.33% 1.65%
Net loans charged off as a
percentage of average total loans 0.20 0.18 0.34
Nonperforming assets as a
percentage of total loans, other
real estate
and nonaccrual debt securities 0.37 0.52 0.83
Allowance for loan losses as a
percentage of total nonperforming
assets 319 253 198
ADDITIONAL DATA
Goodwill $213 $247 $247
Other intangibles 1 1 1
Loan servicing rights 19 19 20
Deferred mutual fund distribution
costs 6 7 8
Amortization of intangibles - - -
Years Ended
December 31,
(in millions, except per share data) 2005 2004
PER SHARE AND COMMON STOCK DATA
Diluted net income $5.11 $4.36
Cash dividends declared 2.20 2.08
Common shareholders' equity (at period end)
Average diluted shares (in thousands) 168,685 173,816
KEY RATIOS
Return on average common
shareholders' equity 16.90% 15.03%
Return on average assets 1.64 1.49
Average common shareholders' equity
as a percentage of average assets 9.71 9.90
Tier 1 common capital ratio *
Tier 1 risk-based capital ratio *
Total risk-based capital ratio *
Leverage ratio *
AVERAGE BALANCES
Commercial loans $24,575 $22,139
Real estate construction loans 3,194 3,264
Commercial mortgage loans 8,566 7,991
Residential mortgage loans 1,388 1,237
Consumer loans 2,696 2,668
Lease financing 1,283 1,272
International loans 2,114 2,162
Total loans $43,816 $40,733
Earning assets 48,232 46,975
Total assets 52,506 50,948
Interest-bearing deposits 25,633 26,023
Total interest-bearing liabilities 31,270 30,838
Noninterest-bearing deposits 15,007 14,122
Common shareholders' equity 5,097 5,041
NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) $1,960 $1,813
Fully taxable equivalent adjustment 4 3
Net interest margin 4.06% 3.86%
CREDIT QUALITY
Nonaccrual loans
Other real estate
Total nonperforming assets
Loans 90 days past due and still accruing
Gross loan charge-offs $174 $268
Loan recoveries 64 74
Net loan charge-offs 110 194
Allowance for loan losses as a
percentage of total loans
Net loans charged off as a percentage
of average total loans 0.25% 0.48%
Nonperforming assets as a percentage
of total loans, other real estate
and nonaccrual debt securities
Allowance for loan losses as a
percentage of total nonperforming assets
ADDITIONAL DATA
Goodwill
Other intangibles
Loan servicing rights
Deferred mutual fund distribution costs
Amortization of intangibles $ - $1
* December 31, 2005 ratios are estimated
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
December 31, September 30, December 31,
(in millions, except share data) 2005 2005 2004
ASSETS
Cash and due from banks $1,609 $1,795 $1,139
Short-term investments 1,159 3,619 3,230
Investment securities
available-for-sale 4,240 4,088 3,943
Commercial loans 23,545 22,754 22,039
Real estate construction loans 3,482 3,289 3,053
Commercial mortgage loans 8,867 8,700 8,236
Residential mortgage loans 1,485 1,444 1,294
Consumer loans 2,697 2,696 2,751
Lease financing 1,295 1,286 1,265
International loans 1,876 1,972 2,205
Total loans 43,247 42,141 40,843
Less allowance for loan losses (516) (558) (673)
Net loans 42,731 41,583 40,170
Premises and equipment 510 499 415
Customers' liability on acceptances
outstanding 59 39 57
Accrued income and other assets 2,705 2,726 2,812
Total assets $53,013 $54,349 $51,766
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $15,666 $17,702 $15,164
Interest-bearing deposits 26,765 25,968 25,772
Total deposits 42,431 43,670 40,936
Short-term borrowings 302 241 193
Acceptances outstanding 59 39 57
Accrued expenses and other
liabilities 1,192 1,242 1,189
Medium- and long-term debt 3,961 4,066 4,286
Total liabilities 47,945 49,258 46,661
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
12/31/05, 9/30/05 and 12/31/04 894 894 894
Capital surplus 461 448 421
Accumulated other comprehensive loss (170) (158) (69)
Retained earnings 4,796 4,683 4,331
Less cost of common stock in treasury
- 15,834,985 shares at 12/31/05,
13,469,654 shares at 9/30/05
and 8,259,328 shares at 12/31/04 (913) (776) (472)
Total shareholders' equity 5,068 5,091 5,105
Total liabilities and
shareholders' equity $53,013 $54,349 $51,766
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Three Months
Ended Years Ended
December 31, December 31,
(in millions, except per share data) 2005 2004 2005 2004
INTEREST INCOME
Interest and fees on loans $698 $544 $2,554 $2,054
Interest on investment securities 41 36 148 147
Interest on short-term investments 6 11 24 36
Total interest income 745 591 2,726 2,237
INTEREST EXPENSE
Interest on deposits 171 91 548 315
Interest on short-term borrowings 24 2 52 4
Interest on medium- and
long-term debt 49 32 170 108
Total interest expense 244 125 770 427
Net interest income 501 466 1,956 1,810
Provision for loan losses (20) (21) (47) 64
Net interest income after
provision for loan losses 521 487 2,003 1,746
NONINTEREST INCOME
Service charges on deposit accounts 55 53 218 231
Fiduciary income 44 43 177 171
Commercial lending fees 19 14 63 55
Letter of credit fees 14 17 70 66
Foreign exchange income 10 9 37 37
Brokerage fees 9 9 36 36
Investment advisory revenue, net 15 9 51 35
Card fees 11 9 39 32
Bank-owned life insurance 10 6 38 34
Equity in earnings of unconsolidated
subsidiaries 3 1 16 12
Warrant income 2 1 9 7
Net gain on sales of businesses 55 - 56 7
Other noninterest income 34 32 132 134
Total noninterest income 281 203 942 857
NONINTEREST EXPENSES
Salaries 225 193 820 760
Employee benefits 47 40 184 159
Total salaries and employee
benefits 272 233 1,004 919
Net occupancy expense 31 32 121 125
Equipment expense 14 15 56 58
Outside processing fee expense 22 17 78 68
Software expense 14 12 49 43
Customer services 19 6 69 23
Litigation and operational losses 4 (3) 18 24
Provision for credit losses on
lending-related commitments 25 (3) 18 (12)
Other noninterest expenses 86 71 253 245
Total noninterest expenses 487 380 1,666 1,493
Income before income taxes 315 310 1,279 1,110
Provision for income taxes 108 103 418 353
NET INCOME $207 $207 $861 $757
Basic net income per common share $1.27 $1.22 $5.17 $4.41
Diluted net income per common share 1.25 1.21 5.11 4.36
Cash dividends declared on common
stock 90 88 367 356
Dividends per common share 0.55 0.52 2.20 2.08
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
(in millions, except 2005 2005 2005 2005 2004
per share data)
INTEREST INCOME
Interest and fees on loans $698 $674 $616 $566 $544
Interest on investment securities 41 38 34 35 36
Interest on short-term investments 6 7 5 6 11
Total interest income 745 719 655 607 591
INTEREST EXPENSE
Interest on deposits 171 147 122 108 91
Interest on short-term borrowings 24 16 9 3 2
Interest on medium- and
long-term debt 49 44 41 36 32
Total interest expense 244 207 172 147 125
Net interest income 501 512 483 460 466
Provision for loan losses (20) (30) 2 1 (21)
Net interest income after
provision for loan losses 521 542 481 459 487
NONINTEREST INCOME
Service charges on
deposit accounts 55 55 54 54 53
Fiduciary income 44 44 43 46 43
Commercial lending fees 19 16 16 12 14
Letter of credit fees 14 18 18 20 17
Foreign exchange income 10 9 9 9 9
Brokerage fees 9 10 9 8 9
Investment advisory revenue, net 15 14 12 10 9
Card fees 11 10 9 9 9
Bank-owned life insurance 10 9 10 9 6
Equity in earnings of
unconsolidated subsidiaries 3 4 4 5 1
Warrant income 2 2 3 2 1
Net gain on sales of businesses 55 1 - - -
Other noninterest income 34 40 32 26 32
Total noninterest income 281 232 219 210 203
NONINTEREST EXPENSES
Salaries 225 209 197 189 193
Employee benefits 47 46 44 47 40
Total salaries and employee
benefits 272 255 241 236 233
Net occupancy expense 31 30 28 32 32
Equipment expense 14 14 14 14 15
Outside processing fee expense 22 19 20 17 17
Software expense 14 12 11 12 12
Customer services 19 29 10 11 6
Litigation and operational losses 4 4 7 3 (3)
Provision for credit losses on
lending-related commitments 25 (1) (3) (3) (3)
Other noninterest expenses 86 60 55 52 71
Total noninterest expenses 487 422 383 374 380
Income before income taxes 315 352 317 295 310
Provision for income taxes 108 114 100 96 103
NET INCOME $207 $238 $217 $199 $207
Basic net income per common share $1.27 $1.43 $1.29 $1.18 $1.22
Diluted net income per
common share 1.25 1.41 1.28 1.16 1.21
Cash dividends declared on
common stock 90 92 92 93 88
Dividends per common share 0.55 0.55 0.55 0.55 0.52
Fourth Quarter 2005 Compared To:
Third Quarter Fourth Quarter
2005 2004
(in millions, except per share data) Amount Percent Amount Percent
INTEREST INCOME
Interest and fees on loans $24 3.5% $154 28.1%
Interest on investment securities 3 8.0 5 15.3
Interest on short-term investments (1) (0.7) (5) (40.2)
Total interest income 26 3.7 154 26.1
INTEREST EXPENSE
Interest on deposits 24 17.2 80 88.2
Interest on short-term borrowings 8 50.5 22 N/M
Interest on medium- and long-term
debt 5 8.3 17 52.0
Total interest expense 37 17.8 119 96.4
Net interest income (11) (2.1) 35 7.4
Provision for loan losses 10 33.3 1 4.8
Net interest income after
provision for loan losses (21) (3.8) 34 6.9
NONINTEREST INCOME
Service charges on deposit accounts - (1.4) 2 3.1
Fiduciary income - (0.6) 1 2.2
Commercial lending fees 3 21.4 5 47.1
Letter of credit fees (4) (24.0) (3) (18.7)
Foreign exchange income 1 2.1 1 7.6
Brokerage fees (1) (6.6) - (1.2)
Investment advisory revenue, net 1 7.5 6 58.2
Card fees 1 8.6 2 25.4
Bank-owned life insurance 1 7.9 4 42.5
Equity in earnings of unconsolidated
subsidiaries (1) (29.0) 2 168.6
Warrant income - 39.1 1 47.6
Net gain on sales of businesses 54 N/M 55 N/M
Other noninterest income (6) (14.9) 2 7.9
Total noninterest income 49 20.5 78 37.8
NONINTEREST EXPENSES
Salaries 16 7.7 32 16.7
Employee benefits 1 1.4 7 15.0
Total salaries and employee
benefits 17 6.5 39 16.4
Net occupancy expense 1 5.3 (1) (4.9)
Equipment expense - (0.1) (1) (2.0)
Outside processing fee expense 3 10.8 5 27.2
Software expense 2 21.1 2 18.1
Customer services (10) (34.7) 13 241.1
Litigation and operational losses - 31.0 7 (226.1)
Provision for credit losses on
lending-related commitments 26 N/M 28 N/M
Other noninterest expenses 26 43.0 15 20.6
Total noninterest expenses 65 15.4 107 28.2
Income before income taxes (37) (10.7) 5 1.1
Provision for income taxes (6) (6.7) 5 3.6
NET INCOME $(31) (12.7)% $- (0.2)%
Basic net income per common share $(0.16) (11.2)% $0.05 4.1%
Diluted net income per common share (0.16) (11.3) 0.04 3.3
Cash dividends declared on common
stock (2) (2.6) 2 1.7
Dividends per common share - 0.0 0.03 5.8
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
2005 2004
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Balance at beginning of
period $558 $609 $636 $673 $729
Loans charged-off:
Commercial 14 20 29 28 39
Real estate
construction:
Real estate
construction
business line 1 1 - - -
Other - - - - -
Total real
estate
construction 1 1 - - -
Commercial mortgage:
Commercial real
estate business
line - - 2 2 4
Other 1 4 5 3 -
Total
commercial
mortgage 1 4 7 5 4
Residential mortgage 1 - - - -
Consumer 3 6 3 3 5
Lease financing 18 13 3 3 4
International - 3 1 7 3
Total loans
charged-off 38 47 43 46 55
Recoveries on loans
previously charged-off:
Commercial 13 23 12 7 14
Real estate
construction - - - - -
Commercial mortgage 1 1 1 - 1
Residential mortgage - - - - -
Consumer 2 2 - 1 -
Lease financing - - - - -
International - - 1 - 5
Total recoveries 16 26 14 8 20
Net loans charged-off 22 21 29 38 35
Provision for loan
losses (20) (30) 2 1 (21)
Balance at end of period $516 $558 $609 $636 $673
Allowance for loan
losses as a percentage
of total loans 1.19% 1.33% 1.41% 1.52% 1.65%
Net loans charged-off as
a percentage of average
total loans 0.20 0.18 0.27 0.36 0.34
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS
Comerica Incorporated and Subsidiaries
2005 2004
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Balance at beginning of
period $14 $15 $18 $21 $24
Charge-offs on lending-
related commitments (1) 6 - - - -
Provision for credit
losses on lending-
related commitments 25 (1) (3) (3) (3)
Balance at end of period $33 $14 $15 $18 $21
(1) Charge-offs result from the sale of unfunded lending-related commitments.
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
2005 2004
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
SUMMARY OF NONPERFORMING
ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial $65 $81 $125 $161 $161
Real estate construction:
Real estate
construction business
line 3 4 8 18 31
Other - - 2 2 3
Total real estate
construction 3 4 10 20 34
Commercial mortgage:
Commercial real estate
business line 6 9 9 11 6
Other 29 35 32 38 58
Total commercial
mortgage 35 44 41 49 64
Residential mortgage 2 1 2 2 1
Consumer 2 1 2 1 1
Lease financing 13 39 9 12 15
International 18 16 23 24 36
Total nonaccrual
loans 138 186 212 269 312
Reduced-rate loans - - - - -
Total
nonperforming
loans 138 186 212 269 312
Other real estate 24 34 34 42 27
Nonaccrual debt securities - - - - -
Total
nonperforming
assets $162 $220 $246 $311 $339
Nonperforming loans as a
percentage of total loans 0.32% 0.44% 0.49% 0.64% 0.76%
Nonperforming assets as a
percentage of total loans,
other real estate and
nonaccrual debt
securities 0.37 0.52 0.57 0.75 0.83
Allowance for loan losses as a
percentage of total
nonperforming assets 319 253 248 204 198
Loans past due 90 days or more
and still accruing $16 $14 $24 $23 $15
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning
of period $186 $212 $269 $312 $361
Loans transferred to
nonaccrual (1) 28 81 47 66 71
Nonaccrual business loan
gross charge-offs (2) (34) (40) (38) (42) (49)
Loans transferred to
accrual status (1) (11) - - (4) (7)
Nonaccrual business loans
sold (3) (4) (19) - (14) (33)
Payments/Other (4) (27) (48) (66) (49) (31)
Nonaccrual loans at end of
period $138 $186 $212 $269 $312
(1) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(2) Analysis of gross loan charge-offs:
Nonaccrual business
loans $34 $40 $38 $42 $49
Performing watch list
loans - 1 2 1 1
Consumer loans and
residential mortgage
loans 4 6 3 3 5
Total gross loan charge-
offs $38 $47 $43 $46 $55
(3) Analysis of loans sold:
Nonaccrual business
loans $4 $19 $- $14 $33
Performing watch list
loans sold 15 34 7 4 7
Total loans sold $19 $53 $7 $18 $40
(4) Net change related to nonaccrual loans with balances less than $2 million, other than business loan gross charge-offs and nonaccrual loans sold, are included in Payments/Other.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
December 31, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1)(2)(3) $25,666 $388 5.99%
Real estate construction loans 3,416 68 7.94
Commercial mortgage loans (1) 8,799 149 6.70
Residential mortgage loans 1,465 22 5.87
Consumer loans 2,675 43 6.45
Lease financing 1,288 13 4.08
International loans 1,940 32 6.52
Business loan swap income - (16) -
Total loans (2)(3) 45,249 699 6.13
Investment securities
available-for-sale (4) 4,037 41 3.97
Short-term investments 478 6 5.42
Total earning assets 49,764 746 5.94
Cash and due from banks 1,757
Allowance for loan losses (562)
Accrued income and other assets 3,171
Total assets $54,130
Money market and NOW deposits (1) $17,152 102 2.36
Savings deposits (1) 1,502 1 0.61
Certificates of deposit (1) 6,723 57 3.35
Foreign office time deposits 943 11 4.46
Total interest-bearing
deposits 26,320 171 2.59
Short-term borrowings 2,350 24 4.06
Medium- and long-term debt 4,013 49 4.77
Total interest-bearing
sources 32,683 244 2.96
Noninterest-bearing deposits (1) 15,158
Accrued expenses and other
liabilities 1,188
Common shareholders' equity 5,101
Total liabilities and
shareholders' equity $54,130
Net interest income/rate spread (FTE) $502 2.98
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 1.02
Net interest margin (as a percentage
of average earning assets)
(FTE) (2)(3) 4.00%
(1) FSD balances included above:
Loans (primarily low-rate) $2,769 $3 0.38%
Interest-bearing deposits 2,613 22 3.38
Noninterest-bearing deposits 5,866
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.68)%
Total loans (0.37)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.22)
(3) Impact of third quarter 2005
warrant accounting change on the
following:
Commercial loans
Total loans
Net interest margin (FTE)
(4) The average rate for investment securities available-for-sale was computed using average historical cost.
Three Months Ended
September 30, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1)(2)(3) $25,230 $378 5.95%
Real estate construction loans 3,202 60 7.40
Commercial mortgage loans (1) 8,631 138 6.37
Residential mortgage loans 1,418 20 5.76
Consumer loans 2,703 41 6.04
Lease financing 1,300 10 2.98
International loans 2,098 33 6.27
Business loan swap income - (5) -
Total loans (2)(3) 44,582 675 6.01
Investment securities
available-for-sale (4) 3,935 38 3.80
Short-term investments 549 7 4.76
Total earning assets 49,066 720 5.82
Cash and due from banks 1,788
Allowance for loan losses (601)
Accrued income and other assets 3,209
Total assets $53,462
Money market and NOW deposits (1) $16,987 89 2.09
Savings deposits (1) 1,531 2 0.52
Certificates of deposit (1) 5,912 44 2.92
Foreign office time deposits 1,110 12 4.21
Total interest-bearing
deposits 25,540 147 2.28
Short-term borrowings 1,804 16 3.52
Medium- and long-term debt 4,144 44 4.26
Total interest-bearing
sources 31,488 207 2.61
Noninterest-bearing deposits (1) 15,734
Accrued expenses and other
liabilities 1,124
Common shareholders' equity 5,116
Total liabilities and
shareholders' equity $53,462
Net interest income/rate spread (FTE) $513 3.21
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 0.94
Net interest margin (as a percentage
of average earning assets)
(FTE) (2)(3) 4.15%
(1) FSD balances included above:
Loans (primarily low-rate) $2,334 $2 0.42%
Interest-bearing deposits 2,578 20 3.04
Noninterest-bearing deposits 6,430
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.56)%
Total loans (0.31)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.18)
(3) Impact of third quarter 2005
warrant accounting change on the
following:
Commercial loans $20 0.32%
Total loans 20 0.18
Net interest margin (FTE) 20 0.16
(4) The average rate for investment securities available-for-sale was computed using average historical cost.
Three Months Ended
December 31, 2004
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1)(2)(3) $22,563 $265 4.66%
Real estate construction loans 3,178 48 5.99
Commercial mortgage loans (1) 7,999 111 5.53
Residential mortgage loans 1,275 18 5.59
Consumer loans 2,721 34 5.04
Lease financing 1,259 13 4.09
International loans 2,134 29 5.40
Business loan swap income - 28 -
Total loans (2)(3) 41,129 546 5.28
Investment securities
available-for-sale (4) 4,052 35 3.48
Short-term investments 1,837 11 2.36
Total earning assets 47,018 592 5.01
Cash and due from banks 1,698
Allowance for loan losses (731)
Accrued income and other assets 3,131
Total assets $51,116
Money market and NOW deposits (1) $17,755 57 1.27
Savings deposits (1) 1,605 1 0.41
Certificates of deposit (1) 5,520 28 2.01
Foreign office time deposits 692 5 2.99
Total interest-bearing
deposits 25,572 91 1.42
Short-term borrowings 278 2 1.85
Medium- and long-term debt 4,342 32 2.91
Total interest-bearing
sources 30,192 125 1.64
Noninterest-bearing deposits (1) 14,755
Accrued expenses and other
liabilities 1,092
Common shareholders' equity 5,077
Total liabilities and
shareholders' equity $51,116
Net interest income/rate spread (FTE) $467 3.37
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 0.59
Net interest margin (as a percentage
of average earning assets)
(FTE) (2)(3) 3.96%
(1) FSD balances included above:
Loans (primarily low-rate) $1,113 $2 0.54%
Interest-bearing deposits 2,434 12 2.00
Noninterest-bearing deposits 5,575
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.22)%
Total loans (0.13)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.08)
(3) Impact of third quarter 2005
warrant accounting change on the
following:
Commercial loans
Total loans
Net interest margin (FTE)
(4) The average rate for investment securities available-for-sale was computed using average historical cost.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Years Ended
December 31, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1)(2)(3) $24,575 $1,381 5.62%
Real estate construction loans 3,194 231 7.23
Commercial mortgage loans (1) 8,566 534 6.23
Residential mortgage loans 1,388 80 5.74
Consumer loans 2,696 159 5.89
Lease financing 1,283 49 3.81
International loans 2,114 126 5.98
Business loan swap income - (2) -
Total loans (2)(3) 43,816 2,558 5.84
Investment securities
available-for-sale (4) 3,861 148 3.76
Short-term investments 555 24 4.45
Total earning assets 48,232 2,730 5.65
Cash and due from banks 1,721
Allowance for loan losses (623)
Accrued income and other assets 3,176
Total assets $52,506
Money market and NOW deposits (1) $17,282 337 1.95
Savings deposits (1) 1,545 7 0.49
Certificates of deposit (1) 5,929 167 2.81
Foreign office time deposits 877 37 4.18
Total interest-bearing deposits 25,633 548 2.14
Short-term borrowings 1,451 52 3.59
Medium- and long-term debt 4,186 170 4.05
Total interest-bearing sources 31,270 770 2.46
Noninterest-bearing deposits (1) 15,007
Accrued expenses and
other liabilities 1,132
Common shareholders' equity 5,097
Total liabilities and
shareholders' equity $52,506
Net interest income/
rate spread (FTE) $1,960 3.19
FTE adjustment $4
Impact of net noninterest-bearing
sources of funds 0.87
Net interest margin (as a
percentage of average
earning assets) (FTE) (2)(3) 4.06%
(1) FSD balances included above:
Loans (primarily low-rate) $1,893 $8 0.45%
Interest-bearing deposits 2,600 76 2.91
Noninterest-bearing deposits 5,851
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.43)%
Total loans (0.24)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.15)
(3) Impact of third quarter 2005
warrant accounting change
on the following:
Commercial loans $20 0.08%
Total loans 20 0.05
Net interest margin (FTE) 20 0.04
(4) The average rate for investment securities available-for-sale was computed using average historical cost.
Years Ended
December 31, 2004
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1)(2)(3) $22,139 $933 4.22%
Real estate construction loans 3,264 177 5.43
Commercial mortgage loans (1) 7,991 415 5.19
Residential mortgage loans 1,237 70 5.68
Consumer loans 2,668 126 4.73
Lease financing 1,272 52 4.06
International loans 2,162 102 4.69
Business loan swap income - 182 -
Total loans (2)(3) 40,733 2,057 5.05
Investment securities
available-for-sale (4) 4,321 147 3.36
Short-term investments 1,921 36 1.88
Total earning assets 46,975 2,240 4.76
Cash and due from banks 1,685
Allowance for loan losses (787)
Accrued income and other assets 3,075
Total assets $50,948
Money market and NOW deposits (1) $17,768 188 1.06
Savings deposits (1) 1,629 6 0.39
Certificates of deposit (1) 5,962 104 1.74
Foreign office time deposits 664 17 2.60
Total interest-bearing deposits 26,023 315 1.21
Short-term borrowings 275 4 1.25
Medium- and long-term debt 4,540 108 2.39
Total interest-bearing sources 30,838 427 1.38
Noninterest-bearing deposits (1) 14,122
Accrued expenses and other
liabilities 947
Common shareholders' equity 5,041
Total liabilities and
shareholders' equity $50,948
Net interest income/
rate spread (FTE) $1,813 3.38
FTE adjustment $3
Impact of net noninterest-bearing
sources of funds 0.48
Net interest margin (as a percentage
of average earning assets) (FTE) (2)(3) 3.86%
(1) FSD balances included above:
Loans (primarily low-rate) $885 $5 0.53%
Interest-bearing deposits 2,027 31 1.53
Noninterest-bearing deposits 5,280
(2) Impact of FSD loans (primarily low-rate) on the following:
Commercial loans (0.15)%
Total loans (0.10)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.06)
(3) Impact of third quarter 2005 warrant accounting change on the
following:
Commercial loans
Total loans
Net interest margin (FTE)
(4) The average rate for investment securities available-for-sale was computed using average historical cost.
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
December 31, September 30, June 30,
(in millions, except per share data) 2005 2005 2005
Commercial loans:
Floor plan $2,847 $2,065 $2,766
Other 20,698 20,689 20,924
Total commercial loans 23,545 22,754 23,690
Real estate construction loans:
Real estate construction
business line 2,831 2,674 2,587
Other 651 615 581
Total real estate construction
loans 3,482 3,289 3,168
Commercial mortgage loans:
Commercial real estate
business line 1,450 1,440 1,465
Other 7,417 7,260 7,071
Total commercial mortgage loans 8,867 8,700 8,536
Residential mortgage loans 1,485 1,444 1,394
Consumer loans:
Home equity 1,775 1,818 1,867
Other consumer 922 878 834
Total consumer loans 2,697 2,696 2,701
Lease financing 1,295 1,286 1,296
International loans 1,876 1,972 2,239
Total loans $43,247 $42,141 $43,024
Goodwill $213 $247 $247
Other intangible assets 1 1 1
Loan servicing rights 19 19 19
Deferred mutual fund distribution costs 6 7 7
Amortization of intangibles
(quarterly) - - -
Tier 1 common capital ratio* 7.83% 7.98% 7.88%
Tier 1 risk-based capital ratio* 8.44 8.60 8.49
Total risk-based capital ratio * 11.66 12.07 12.08
Leverage ratio* 10.02 10.07 10.36
Book value per share $31.11 $30.81 $30.60
Market value per share for the quarter:
High $60.25 $63.38 $59.29
Low 53.60 56.80 53.17
Close 56.76 58.90 57.80
Quarterly ratios:
Return on average common
shareholders' equity 16.28% 18.59% 16.99%
Return on average assets 1.53 1.78 1.68
Efficiency ratio 62.21 56.63 54.49
Number of banking offices 381 370 364
Number of employees - full time
equivalent 10,834 10,779 10,826
March 31, December 31,
(in millions, except per share data) 2005 2004
Commercial loans:
Floor plan $2,668 $2,575
Other 20,112 19,464
Total commercial loans 22,780 22,039
Real estate construction loans:
Real estate construction
business line 2,451 2,461
Other 584 592
Total real estate construction loans 3,035 3,053
Commercial mortgage loans:
Commercial real estate business line 1,555 1,556
Other 6,860 6,680
Total commercial mortgage loans 8,415 8,236
Residential mortgage loans 1,335 1,294
Consumer loans:
Home equity 1,797 1,837
Other consumer 903 914
Total consumer loans 2,700 2,751
Lease financing 1,262 1,265
International loans 2,209 2,205
Total loans $41,736 $40,843
Goodwill $247 $247
Other intangible assets 1 1
Loan servicing rights 19 20
Deferred mutual fund distribution costs 7 8
Amortization of intangibles (quarterly) - -
Tier 1 common capital ratio* 8.04% 8.13%
Tier 1 risk-based capital ratio* 8.66 8.77
Total risk-based capital ratio * 12.49 12.75
Leverage ratio* 10.50 10.37
Book value per share $29.81 $29.94
Market value per share for the quarter:
High $61.40 $63.80
Low 53.70 57.81
Close 55.08 61.02
Quarterly ratios:
Return on average common
shareholders' equity 15.73% 16.39%
Return on average assets 1.57 1.63
Efficiency ratio 55.70 56.61
Number of banking offices 376 377
Number of employees - full time equivalent 10,803 10,892
* December 31, 2005 ratios are estimated
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
December 31, September 30, December 31,
(in millions, except share data) 2005 2005 2004
ASSETS
Cash and due from subsidiary bank $11 $16 $1
Short-term investments with
subsidiary bank 264 289 289
Investment in subsidiaries,
principally banks 5,587 5,597 5,585
Premises and equipment 3 3 3
Other assets 257 256 304
Total assets $6,122 $6,161 $6,182
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt $813 $817 $824
Other liabilities 241 253 253
Total liabilities 1,054 1,070 1,077
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
12/31/05, 9/30/05 and 12/31/04 894 894 894
Capital surplus 461 448 421
Accumulated other
comprehensive loss (170) (158) (69)
Retained earnings 4,796 4,683 4,331
Less cost of common stock
in treasury - 15,834,985 shares
at 12/31/05, 13,469,654 shares
at 9/30/05 and 8,259,328 shares
at 12/31/04 (913) (776) (472)
Total shareholders' equity 5,068 5,091 5,105
Total liabilities and
shareholders' equity $6,122 $6,161 $6,182
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
Other
(in millions, Common Stock Capital Comprehensive
except per In Shares Amount Surplus Income (Loss)
share data)
BALANCE AT JANUARY 1, 2004 175.0 $894 $384 $74
Net income - - - -
Other comprehensive loss,
net of tax - - - (143)
Total comprehensive income
Cash dividends declared on
common stock
($2.08 per share) - - - -
Purchase of common stock (6.5) - - -
Net issuance of common
stock under employee
stock plans 2.0 - 2 -
Recognition of stock-based
compensation expense - - 35 -
BALANCE AT
DECEMBER 31, 2004 170.5 $894 $421 $(69)
BALANCE AT JANUARY 1, 2005 170.5 $894 $421 $(69)
Net income - - - -
Other comprehensive
loss, net of tax - - - (101)
Total comprehensive income
Cash dividends declared
on common stock
($2.20 per share) - - - -
Purchase of common stock (9.0) - - -
Net issuance of common stock
under employee stock plans 1.4 - (4) -
Recognition of stock-based
compensation expense - - 44 -
BALANCE AT
DECEMBER 31, 2005 162.9 $894 $461 $(170)
Total
Retained Treasury Shareholders'
(in millions, except per share data) Earnings Stock Equity
BALANCE AT JANUARY 1, 2004 $3,973 $(215) $5,110
Net income 757 - 757
Other comprehensive loss, net of tax - - (143)
Total comprehensive income 614
Cash dividends declared on
common stock ($2.08 per share) (356) - (356)
Purchase of common stock - (370) (370)
Net issuance of common stock under
employee stock plans (43) 113 72
Recognition of stock-based
compensation expense - - 35
BALANCE AT DECEMBER 31, 2004 $4,331 $(472) $5,105
BALANCE AT JANUARY 1, 2005 $4,331 $(472) $5,105
Net income 861 - 861
Other comprehensive loss, net of tax - - (101)
Total comprehensive income 760
Cash dividends declared on
common stock ($2.20 per share) (367) - (367)
Purchase of common stock - (525) (525)
Net issuance of common stock
under employee stock plans (29) 84 51
Recognition of stock-based
compensation expense - - 44
BALANCE AT DECEMBER 31, 2005 $4,796 $(913) $5,068
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Bank
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $336 $367 $344
Provision for loan losses (16) (23) 13
Noninterest income 71 71 66
Noninterest expenses 226 185 150
Provision (benefit) for income
taxes (FTE) 72 90 87
Net income (loss) $125 $186 $160
Net charge-offs $15 $16 $27
Selected average balances:
Assets $37,309 $36,661 $33,259
Loans 35,849 35,273 32,049
Deposits 20,578 20,877 20,184
Liabilities 21,412 21,678 20,937
Attributed equity 2,585 2,548 2,495
Statistical data:
Return on average assets (1) 1.34% 2.03% 1.93%
Return on average attributed equity 19.36 29.17 25.72
Net interest margin (2) 3.71 4.13 4.26
Efficiency ratio 55.41 42.13 36.49
Finance
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $(32) $(47) $(64)
Provision for loan losses - - -
Noninterest income 22 11 9
Noninterest expenses 1 - 1
Provision (benefit) for income
taxes (FTE) (7) (16) (19)
Net income (loss) $(4) $(20) $(37)
Net charge-offs $- $- $-
Selected average balances:
Assets $5,483 $5,526 $7,000
Loans (9) (22) (5)
Deposits 1,615 1,008 729
Liabilities 7,983 6,995 5,426
Attributed equity 469 517 612
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Small Business & Personal Financial Services
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $157 $153 $149
Provision for loan losses 9 7 4
Noninterest income 51 54 50
Noninterest expenses 154 138 132
Provision (benefit) for income
taxes (FTE) 16 22 23
Net income (loss) $29 $40 $40
Net charge-offs $8 $7 $6
Selected average balances:
Assets $6,609 $6,575 $6,359
Loans 5,891 5,862 5,703
Deposits 16,778 16,774 16,883
Liabilities 16,781 16,774 16,877
Attributed equity 826 805 782
Statistical data:
Return on average assets (1) 0.66% 0.91% 0.91%
Return on average attributed equity 14.12 19.79 20.46
Net interest margin (2) 3.71 3.63 3.51
Efficiency ratio 74.08 66.96 66.34
Other
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $2 $2 $1
Provision for loan losses (14) (10) (40)
Noninterest income - 13 6
Noninterest expenses (8) 10 9
Provision (benefit) for income
taxes (FTE) 6 6 6
Net income (loss) $18 $9 $32
Net charge-offs $(2) $1 $-
Selected average balances:
Assets $913 $984 $897
Loans 45 41 43
Deposits (50) 65 53
Liabilities 277 344 315
Attributed equity 747 826 759
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Wealth & Institutional Management
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $39 $38 $37
Provision for loan losses 1 (4) 2
Noninterest income 137 83 72
Noninterest expenses 114 89 88
Provision (benefit) for income
taxes (FTE) 22 13 7
Net income (loss) $39 $23 $12
Net charge-offs $1 $(3) $2
Selected average balances:
Assets $3,816 $3,716 $3,601
Loans 3,473 3,428 3,339
Deposits 2,557 2,550 2,478
Liabilities 2,576 2,555 2,484
Attributed equity 474 420 429
Statistical data:
Return on average assets (1) 4.07% 2.45% 1.37%
Return on average attributed equity 32.73 21.67 11.51
Net interest margin (2) 4.44 4.36 4.48
Efficiency ratio 64.77 73.41 80.33
Total
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $502 $513 $467
Provision for loan losses (20) (30) (21)
Noninterest income 281 232 203
Noninterest expenses 487 422 380
Provision (benefit) for income
taxes (FTE) 109 115 104
Net income (loss) $207 $238 $207
Net charge-offs $22 $21 $35
Selected average balances:
Assets $54,130 $53,462 $51,116
Loans 45,249 44,582 41,129
Deposits 41,478 41,274 40,327
Liabilities 49,029 48,346 46,039
Attributed equity 5,101 5,116 5,077
Statistical data:
Return on average assets (1) 1.53% 1.78% 1.63%
Return on average attributed equity 16.28 18.59 16.39
Net interest margin (2) 4.00 4.15 3.96
Efficiency ratio 62.21 56.63 56.61
(1) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(2) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.
N/M - Not Meaningful
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Midwest & Other Markets
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $271 $272 $270
Provision for loan losses (2) - 7
Noninterest income 201 154 137
Noninterest expenses 304 233 225
Provision (benefit) for income
taxes (FTE) 61 59 55
Net income (loss) $109 $134 $120
Net charge-offs $21 $23 $13
Selected average balances:
Assets $25,088 $25,324 $24,220
Loans 23,518 23,832 22,930
Deposits 18,833 18,856 19,122
Liabilities 19,629 19,621 19,859
Attributed equity 2,217 2,162 2,163
Statistical data:
Return on average assets (1) 1.74% 2.11% 1.99%
Return on average attributed equity 19.66 24.71 22.23
Net interest margin (2) 4.54 4.50 4.66
Efficiency ratio 64.25 54.73 55.14
Number of banking offices 255 255 268
Florida
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $10 $11 $10
Provision for loan losses 1 (4) 1
Noninterest income 4 4 4
Noninterest expenses 10 8 7
Provision (benefit) for income
taxes (FTE) 1 4 2
Net income (loss) $2 $7 $4
Net charge-offs $3 $1 $-
Selected average balances:
Assets $1,500 $1,447 $1,388
Loans 1,484 1,435 1,375
Deposits 314 318 274
Liabilities 312 316 272
Attributed equity 77 74 67
Statistical data:
Return on average assets (1) 0.54% 2.01% 1.11%
Return on average attributed equity 10.56 38.96 23.06
Net interest margin (2) 2.70 3.17 2.94
Efficiency ratio 66.94 51.06 48.29
Number of banking offices 6 6 6
Western
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $188 $214 $190
Provision for loan losses (3) (18) 8
Noninterest income 34 30 29
Noninterest expenses 124 123 93
Provision (benefit) for income
taxes (FTE) 38 52 49
Net income (loss) $63 $87 $69
Net charge-offs $1 $(2) $19
Selected average balances:
Assets $15,684 $14,920 $12,750
Loans 14,960 14,226 12,097
Deposits 17,048 17,415 16,353
Liabilities 17,106 17,458 16,376
Attributed equity 1,088 1,055 1,026
Statistical data:
Return on average assets (1) 1.39% 1.88% 1.59%
Return on average attributed equity 23.21 33.07 26.94
Net interest margin (2) 4.36 4.89 4.61
Efficiency ratio 56.44 50.26 42.43
Number of banking offices 61 55 51
Finance & Other Businesses
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $(30) $(45) $(63)
Provision for loan losses (14) (10) (40)
Noninterest income 22 24 15
Noninterest expenses (7) 10 10
Provision (benefit) for income
taxes (FTE) (1) (10) (13)
Net income (loss) $14 $(11) $(5)
Net charge-offs $(2) $- $-
Selected average balances:
Assets $6,396 $6,509 $7,897
Loans 36 19 38
Deposits 1,565 1,074 782
Liabilities 8,260 7,339 5,740
Attributed equity 1,216 1,343 1,372
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Number of banking offices - - -
Texas
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $63 $61 $60
Provision for loan losses (2) 2 3
Noninterest income 20 20 18
Noninterest expenses 56 48 45
Provision (benefit) for income
taxes (FTE) 10 10 11
Net income (loss) $19 $21 $19
Net charge-offs $(1) $(1) $3
Selected average balances:
Assets $5,462 $5,262 $4,861
Loans 5,251 5,070 4,689
Deposits 3,718 3,611 3,796
Liabilities 3,722 3,612 3,792
Attributed equity 503 482 449
Statistical data:
Return on average assets (1) 1.39% 1.54% 1.61%
Return on average attributed equity 15.08 16.88 17.42
Net interest margin (2) 4.73 4.74 5.15
Efficiency ratio 67.10 59.72 57.61
Number of banking offices 59 54 52
Total
December 31, September 30, December 31,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $502 $513 $467
Provision for loan losses (20) (30) (21)
Noninterest income 281 232 203
Noninterest expenses 487 422 380
Provision (benefit) for income
taxes (FTE) 109 115 104
Net income (loss) $207 $238 $207
Net charge-offs $22 $21 $35
Selected average balances:
Assets $54,130 $53,462 $51,116
Loans 45,249 44,582 41,129
Deposits 41,478 41,274 40,327
Liabilities 49,029 48,346 46,039
Attributed equity 5,101 5,116 5,077
Statistical data:
Return on average assets (1) 1.53% 1.78% 1.63%
Return on average attributed equity 16.28 18.59 16.39
Net interest margin (2) 4.00 4.15 3.96
Efficiency ratio 62.21 56.63 56.61
Number of banking offices 381 370 377
(1) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(2) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.
N/M - Not Meaningful
PRNewswire -- Jan. 19
END FIRST AND FINAL ADD
SOURCE: Comerica Incorporated
